The company is “exploring options,” including a full or
partial sale of assets, for the 77kids by American Eagle brand,
Pittsburgh-based American Eagle said in a statement today. The
brand had a net loss of $24 million on sales of $40 million in
the year ended Jan. 28, according to the statement.

Chief Executive Officer Robert Hanson, who started in
January, has cut inventory and improved product assortment to
boost profitability.

“Although making this decision is disappointing, it is in
the best interest of the company and our shareholders to
prioritize and focus our efforts on businesses with the highest
return potential,” Hanson, previously at Levi Strauss & Co.,
said in the statement.

American Eagle rose 1.6 percent to $18.70 in after-hours
trading at 4:35 p.m. in New York. The company gained 20 percent
this year through today’s close of regular trading.

American Eagle said in a separate statement that Chief
Financial Officer Joan Hilson plans to step down after more than
six years at the company. She will work through the end of July
for an “orderly transition,” and will be succeeded on an
interim basis by Scott Hurd, vice president and controller,
until a replacement is found, the company said.

A charge tied to the 77kids brand sale will be taken,
“primarily in the second and third quarters,” the company said
in the statement, without estimating the amount.

The brand 77kids targets babies, and children up to age 14,
in 22 stores and online, the company said. The business was
introduced in October 2008 as on online-only brand, according to
American Eagle’s most recent annual filing.

The company will announce first-quarter results on May 23.
For the last fiscal year, it had sales of $3.16 billion and net
income of $151.7 million, or 77 cents a share.